Railway company signs loan agreements worth Rs 36,517.51 crore; that is 1.46 times OLA’s current market cap

Railway-finance-corporation-ltd-217280">Indian Railway Finance Corporation (IRFC), a 'Navratna' Public Sector Enterprise and the dedicated financing arm of the Ministry of Railways, has demonstrated a significant expansion of its mandate by signing loan agreements worth Rs 36,517.51 crore. This massive funding commitment, which is approximately 1.46 times the current market capitalisation of OLA (Rs 24,992 crore), underscores IRFC's pivotal role as a diversified infrastructure financier. The total amount is distributed across five crucial projects in the power, coal, and fertiliser sectors, all of which share strong forward and backward linkages with the Indian Railways, reinforcing the company's core mission.

The majority of the sanctioned funds are directed towards strengthening India’s power generation capacity through modern, efficient technology. Key power sector agreements include a Rs 10,560 crore loan to MAHAGENCO for the 2x660 MW supercritical expansion at Koradi Thermal Power Station in Nagpur, and a Rs 12,640 crore Rupee Term Loan to CSPGCL for a similar 2x660 MW project at Korba West. Furthermore, IRFC has signed a Rs 5,929 crore Term Loan with HPGCL for the 800 MW supercritical thermal power project in Yamunanagar. These projects are strategically important for ensuring a reliable power supply to industrial, agricultural, and household consumers in Maharashtra, Chhattisgarh, and Haryana, while simultaneously bolstering railway traction requirements.

Get started today with DSIJ’s Navratri deal — pay for one, access two!

Beyond thermal power generation, IRFC is extending its support to vital infrastructure components that feed the power sector and enhance domestic self-sufficiency. This includes a Rs 3,388.51 crore loan to PVUNL for the development of the Banhardih Captive Coal Block in Jharkhand. Additionally, IRFC is committing Rs 4,000 crore as part of a consortium debt package for the Talcher Fertilizers Limited coal gasification-based urea project. This facility is India’s first of its kind, aiming to utilise indigenous coal to produce 1.27 million metric tonnes of urea annually, thereby aligning with the 'Atmanirbhar Bharat' vision and reducing Reliance on imported natural gas.

These agreements highlight IRFC's successful transition following its 'Navratna' status, as it expands its focus beyond rail infrastructure to cover projects with railway ecosystem linkages, such as power, mining, and Logistics. The thermal plants and the fertiliser facility depend heavily on Indian Railways for the transport of coal and the outward dispatch of finished products like urea, generating significant freight revenue for the national transporter. With a zero-NPA portfolio, IRFC continues to maintain a strong asset quality track record while effectively mobilising competitive resources for critical national infrastructure development.

The company has a market cap of Rs 1.62 lakh crore. The stock is up by 16.7 per cent from its 52-week low of Rs 108.05 per share and has given multibagger returns of 485 per cent in 3 years.

Disclaimer: The article is for informational purposes only and not investment advice.